Holy Cow! Home Prices Improve!

The S&P Case-Shiller home price index is reporting a price increase of 0.4% for the Tampa Bay area from May to June, 2009. That, as memory serves, is the first residential property price increase in the past three years.

I grant you it's just for a 30 day period. Sure, it could be just some kind of goofy anaomoly with the numbers. Yeah, I know, one month does not make a trend.

Even so, it sure is interesting news and might mean that the worst of the real estate slump is behind us, or at least starting to improve.

When you look at the big picture, it's not quite so pretty. Case-Shiller reports that the annual numbers still show that area housing values are down 19.5% from June 2008 to June 2009.

But who cares? Let's be positive about real estate for a change!

I think this is a great excuse to open that special bottle of Merlot I've been saving for just such an occasion.

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Negative Equity Figures Are Staggering

In the Tampa Bay area there are about 700,000 mortgages. Of those, 351,980 borrowers are upside-down in their property. That's 50.6 percent.

Throughout the State of Florida, there are about 4,700,000 mortgages. Of those, 2,300,000 borrowers are upside-down in their property. That's 49.4 percent.

This information came across my desk today. It's from First American CoreLogic.

I find those statistics simply staggering. Mind boggling. Crazy-high.

The reason these figures are so high is because First American CoreLogic changed the way they figure the mortgage amount. They are now including second mortgages, whereas they did not include that debt before. So, the debt figures are now higher. Frankly, I think that's fair. The second mortgage does represent debt against the property so it probably should be included.

Just thought you'd like to see these new figures.

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July Sales Report: Six Steps Forward, One Step Back

It seems to me like the July real estate figures for Pinellas County show that we've taken six steps forward and one baby-step back. We had six consecutive months of nice steady growth this year, but July was kinda flat and perhaps a bit off where we were all hoping the market would go.

Let's take a look ...

As usual, we'll take a quick look at the Absorption Rate (AR) for the county. As you all know by now, the Absorption Rate is the inventory turn and it is calculated by dividing the number of units sold in a month by the total number of units in the Multiple Listing Service.

For single family homes, the July AR was 11.1%. That is the same AR that we had in June, so statistically there was no improvement in single family sales (no statistical reduction either, and that's a good thing). For condos, there was an insignificant reduction in the AR from June to July. The AR for July was down a little to 6.9% from June's 7.0% -- that doesn't amount to much. So, statistically, let's call it an unchanged market from June through July.

Single Family Sales

While statistically the market was unchanged, the actual number of listings and sales show some losses. In July, the number of single family homes listed for sale was reduced to 6,525 from June's 6,702. To be honest, the inventory of homes listed has fallen every month in 2009, and I think that is a good thing for sellers who have a little less competition each month. For buyers, maybe it's not such a good thing since they have fewer choices. Overall, we have to reduce this flood of inventory that has clogged the real estate market for the past few years if we are ever going to get to a point of market equilibrium.

Single family home sales were reduced for the first month this year. In June there were 746 houses sold, but in July only 722 sales were recorded. I don't think this is such a big deal. If you go back and look at sales over the past four or five years like I did while writing this story, I found that single family home sales always, repeat always, drop in July compared to June. So, I'm thinking no big deal just normal seasonal market activity.

The median price for a single family home in Pinellas County fell from $180,000 in July of 2008 to $140,000 in July of 2009. That's a drop of 22.2% year over year.

Condo Sales Info

Condo sales seemed to track right along with single family homes sales. Pretty much the same kind of statistics and numbers that we saw in June.

The number of condos listed fell from June's 6,059 to July's 5,954 -- about one hundred fewer units on the market. Condo inventory has fallen every month this year, so I don't think this is anything to be alarmed about.

We finally had a decrease in the number of condos sold in 2009 during July. In June there were 422 condos sold, but in July only 412. That's a statistically insignificant difference and, like single family homes, the number of condo sales always drops from June to July in the past few years so I think that's just seasonal buying.

The median price for condos in July of 2008 was $152,000 but it fell to $128,000 in July of 2009, a drop of 15.8% year over year.

One word about median prices. I think the drop in median prices shows that more people are buying lower priced houses and condos. This is probably in part due to the increase in first time buyers taking advantage of the government's $8,000 stimulus program and the general reduction in prices as compared to 2005-2006 pricing. It will be interesting to see what happens to median prices when the stimulus program comes to an end later this year.

So, that's what happened last month. Pretty much a repeat of June's numbers with perhaps a slight step backward but nothing to really worry about.

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Bargain Hunters: Head To Fort Myers!

I've probably gotten fifty phone calls from people in the last couple of years who want me to find them a real estate bargain -- then, they'll buy.

Well, if you're looking for a great deal on a residential property, spend a few days looking around in Fort Myers. The Florida city about halfway between Sarasota and Naples has recently suffered a huge drop in real estate prices.

According to the National Association of Realtors and as reported in the St. Petersburg Times, Fort Myers has experienced a 53-percent drop in home prices from the first quater of 2009 to the end of the second quarter. That's a huge loss in only six months. In fact, it is the largest loss in value in the entire U.S.A.

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How To Get A Better Appraisal

Realtor.org has just run an article by Mary Umberger of the Chicago Tribune. Umberger got the information for this article from Maureen Sweeney, the owner of an appraisal firm, on how to get an accurate and fair appraisal. These days, appraisals have been something of a problem, so these tips might prove beneficial.

1. Be There. Maureen Sweeney suggests that both the real estate agent and the seller should be present and should actually follow the appraiser around the property; make sure the appraiser does not miss anything important.

2. Ask Questions. There is absolutely nothing wrong with asking if the appraiser has identified the correct neighborhood boundaries and if the comps are really similar to the subject property. My experience has been that appraisers sometimes go far afield in selecting comps simply because they are not familiar with a neighborhood's boundaries.

3. Bring Data. Maureen writes that you should supply the appraiser with a recent tax bill and a survey for the property.

4. Supporting Data. I frankly never thought of this, but Maureen recommends providing a list of improvements that you have made to the property.

5. Give Your Opinion. If you are a real estate agent, give the appraiser your professional opinion regarding why you think your seller's property is worth more than other properties in the neighborhood.

I hope this helps!

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6 Key Reasons Some Homes Sell And Some Don't

A Tribune Media Services columnist, Ilyce Glink, has written-up the six main reasons why some homes sell and other's don't. I don't really know how much research was done on this because I think most home sellers and real estate agents already know these reasons and take steps to overcome these matters. Anyway, here's what Glink is reporting:

1. Poor photos on the Web. I've been writing that lousy photography on the Web is one of the biggest turn-offs going. It turns off buyers and just as importantly, it turns off real estate agents. If you have no talent with a camera, I suggest you find a friend who does and have them take your photos or, better yet, hire a professional firm to do your interior and exterior photography. We live in a visual age. Poorly composed and exposed photos are a very bad way to start your marketing program. Oh, here's a photo tip. One of the worst problems I see in real estate photography is that the photo shows a property feature that is back lit. Back lighting means the main light is behind the subject of the photo. You can easily overcome back lighting by using the little electronic flash on your digital camera, even in daylight. Try it!

2. Priced too high for the neighborhood. Look, this is a common problem. Sellers need to remember that in a buyer's market only those properties that are properly priced and appear to be at-or-near bargain status are going to be seen and sold. Price your property accordingly and don't be the highest priced house on the block.

3. Blah interior, ho-hum landscaping. Landscaping is important because it creates curb appeal. Without curb appeal your house won't attract many buyers interested to see the inside. If they get inside and get turned-off, well, good luck selling the place. So, before listing the property, spruce up the landscaping, buy a few gallons of paint and have the carpeting cleaned. Oh, and de-clutter, de-clutter, de-clutter. It may make a very big difference.

4. Little (or no) online marketing and hard-to-find MLS listings. We are hearing now that nearly 85% of home buyers begin their real estate search on-line. After that, they call a real estate agent. There are so many on-line sites to search for property that it's easy for buyers to look right in your neighborhood, see what's available and determine accurate pricing. Simply stated, you need an on-line image.

5. Low commissions. I've been writing about this matter for years. If you do not provide an adequate financial incentive for agents to show your property to buyers, they won't. Discounting the commission is simply cutting your own wrists.

6. Miserable maintenance. Buyers want to buy a house that looks like it has been well maintained. Ceiling stains and leaking faucets turn buyers off because they make buyers think the house was not properly maintained over the years and will be a maintenance nightmare if they buy it. Fix the faucets. Paint the ceilings. Sell the house. Oh, and here's another tip: big closets sell little houses. To make closets look bigger, keep items neat and orderly. It simply makes the closet look bigger than it really is, and that just might make the sale.

I hope this is of some help in selling your property!

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